Another dismal performance by India's creaking top order saw the tourists tottering towards a heavy defeat after the second day of the third Test against Australia in Perth on Saturday.

At the close of play, India, needing to win to have any hope of retaining the Border-Gavaskar Trophy, were 88-4 in their second innings after yet another collapse, an overall deficit of 120 runs.

Veteran Rahul Dravid was unbeaten on 32, with Virat Kohli on 21.

Australia were dismissed earlier for 369 in their first innings, bolstered by a pugnacious 180 from opener David Warner, giving the home side an overall lead of 208 after the Indians made just 161 in their first innings.

Paceman Umesh Yadav picked up his first five-wicket Test haul in the Australian innings to give the tourists some hope, but their ageing top-order batsmen again failed to deliver in India's second innings.

As was the case in their 122-run defeat in Melbourne and innings loss in Sydney, the Indian rot set in early in their second innings.

Young left-arm paceman Mitchell Starc picked up the wicket of opener Gautam Gambhir (14), caught in the slips from a steepling delivery in his first over.

Out-of-form opener Virender Sehwag never looked comfortable and fell to Peter Siddle one run later for 10, while Sachin Tendulkar will have to wait at least one more Test for his 100th international century, after being trapped leg-before wicket by Starc for a paltry eight.

V.V.S. Laxman's poor series continued when he was caught in the slips off Ben Hilfenhaus for a nine-ball duck as India slumped to 51-4.

Australia resumed the second day at 149 for no wicket and looked set to bat the Indians out of the match when openers Warner and Ed Cowan put on 214 for the first wicket.

However, three wickets fell to Yadav before lunch -- Cowan (74), Shaun Marsh (11) and Ricky Ponting (seven) -- sparking an Indian fightback.

Warner, dropped on 126, looked set to become the second Australian batsman to pass 200 in as many innings, but he holed out to a back-pedalling Yadav at long-on off paceman Ishant Sharma.